What Is the Difference Between a General and a Limited Power of Attorney?

Jan 6, 2014

A power of attorney is a legal device that is used to empower someone to act on your behalf. If you are the individual who is creating the power of attorney, you are known as the grantor or principal. The individual that is empowered to act on your behalf would be the agent or attorney-in-fact.

The term “attorney-in-fact” does not imply that the individual serving this role is, or must be, a practicing lawyer. Anyone who is an adult of sound mind can act as an agent or attorney-in-fact.

There are different types of powers of attorney that are used for different purposes. In this post we will look at the differences between general powers of attorney and limited powers of attorney.

General Power of Attorney

If you execute a general power of attorney, you are giving the agent broad, sweeping power to act on your behalf. One way of looking at the extent of the power would be to imagine the agent being able to do anything that you can do for yourself.

Indeed, this is a great deal of power. For this reason you should be very careful when you execute a general power of attorney. While it is the exception rather than rule because people obviously choose agents that they trust, instances of abuse of this power are not unheard of.

Limited Power of Attorney

If you do not want to give someone the absolute authority to act on your behalf for every possible purpose, you could execute a limited power of attorney. As the name implies, when you use a limited power of attorney you are empowering the agent to act on your behalf on a limited basis.

To a certain extent you have the ability to custom craft legally binding documents to suit your own needs. With a limited power of attorney you can dictate the circumstances under which the agent is empowered to act on your behalf.

For example, you could empower someone to sign a single legally binding contract on your behalf because you are unable to attend the signing for one reason or another. This person would have power to act on your behalf for this one transaction only.

You could alternately use a limited power of attorney to give someone the power to act on your behalf within a business context for limited purposes beyond a single transaction, but this person could not sell your home or purchase a yacht under your name.

This is a basic look at the differences between general and limited powers of attorney. If you are interested in learning more about powers of attorney, feel free to contact our firm to schedule a free consultation.

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Ryan M. Denman and Dennis D. Duffy

Duffy Law Office, PLLC

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